Capital Goods: June 2012

Baring their teeth

It’s hard to believe, but sinister forces are plotting to change the way your dentist runs his business. At least that’s the pitch coming from supporters and opponents of legislation in the General Assembly that would change the way dentistry is regulated in North Carolina. But despite the rhetoric, don’t worry about that little hole in your tooth that needs filling. Your dentist will likely be there tomorrow.

Supporters of the legislation — mainly the North Carolina Dental Society and the established dentists who make up its membership — argue they aren’t trying to change anything. Rather, they want to protect a concept already written into state law: Only dentists can own and operate dental practices. In other words, no McDonald’s or Wal-Mart of dentistry allowed. The idea behind the law is that professional standards and quality care can only be assured if practicing dentists control the practice.

Other dentists don’t see it that way, at least not when it comes to controlling every facet of their practices, and are farming out administrative tasks such as billing and payroll. The problem is, some of those arrangements don’t look like typical owner-contractor relationships. In a few cases, dentists have sold the equipment used in the practice to for-profit companies, then leased it back. Some have noncompete agreements with them, which regulators say crosses a line. Meanwhile, the footprint of large dental-services companies is growing.

The legislative response may be sweeping new authority for the regulatory State Board of Dental Examiners. Last year, the state Senate quietly passed a bill that includes a long list of no-nos intended to prevent arrangements by which a for-profit company becomes a de facto partner of a dentist. The bill goes on to say that the list isn’t “exhaustive.” It would allow regulators to review each arrangement, which could be stopped on such vague grounds as having “a potential negative impact on patient care.” In other words, the board’s authority to block agreements would be pretty much unfettered.

It was a remarkable piece of legislation during a session in which the new Republican majority crowed about wanting to do away with government regulations that stifle economic growth and impede competition. This year, the House is expected to take its turn drilling into the issue, and a compromise piece of legislation could emerge before lawmakers take their late-summer/fall hiatus. With that in mind, dentists and dental-services companies have begun a knock-down, drag-out that may leave a few of them needing repair to their own pearly whites. They’ve taken to the airwaves with ads to influence legislators and their constituents. A Dental Society one warns of “out-of-state special interests” that want to “force your local dentist out of business” in favor of “big, for-profit, investor-owned, corporate dentistry.” Without the protections, it says, the state will see quality care sacrificed for higher profits. A group called the Alliance for the Access to Dental Care — service companies and dentists opposed to the bill — is running its own ad proclaiming the evils of “powerful lobbyists in Raleigh” out to drive up “your dental costs” and bring “Washington-style regulation to North Carolina.” The ad concludes, “If these powerful lobbyists win, you lose.” (The group has hired its own powerful Raleigh lobbyists.)

The judicial system also has been asked to do an extraction. The legislation’s opponents want the courts to order the dental board to turn over emails they say could shed light on its members’ motives. The board contends that emails between itself and its staff are exempt from disclosure requirements.

It should come as no surprise that dentists running traditional practices don’t want their profession overrun with business arrangements that could put them at a competitive disadvantage and complicate how they deliver care to patients. There’s also nothing particularly startling about regulators, who are charged with overseeing standards designed to ensure patient safety, worrying about profit motives eroding those standards.

What is surprising is that state lawmakers, at least so far, haven’t taken note of the folds of complexity involved. When the bill cleared the Senate, only two senators voted against it. Apparently their colleagues missed the fact that allowing dentists to contract out administrative tasks might lower costs and make it easier to start a practice. In doing so, the market might see more competition, meaning savings for patients. Isn’t that what free-market conservatives are supposed to favor?

Scott Mooneyham is editor of The Insider, www.ncinsider.com. Email him at smooneyh@ncinsider.com.